Carnival Corporation
Thesis
We recommend a long position in Carnival Corp. (CCL) with a two-year target price of ~$57, representing ~53% upside from the 4/17/14 share price of $37.32. The stock is trading at a significant discount to its intrinsic value due to one-time setbacks, and we expect a reversion to positive industry trends and operational improvements under a new CEO to drive substantial margin upside.
Did it work?
The thesis called for ~53% upside to ~$57 within two years, but the stock is down 33.7% from the $37.32 pitch price after 148 months — roughly six times the stated horizon. Not only was the two-year target never reached per the available data, the final outcome is a substantial loss in the opposite direction of the long thesis. The predicted margin-driven reversion clearly did not translate into durable shareholder returns, with later shocks (notably the pandemic-era collapse in cruising) overwhelming any operational improvement.